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View Diary: WATCH: Matt Taibbi on Our Blind Eye to Shockingly Bad Behavior (172 comments)

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  •  Inexcusable we still have too big to fail banks (9+ / 0-)

    From Matt Taibbi

    Secrets and Lies of the Bailout
    The federal rescue of Wall Street didn’t fix the economy – it created a permanent bailout state based on a Ponzi-like confidence scheme. And the worst may be yet to come

    It was all a lie – one of the biggest and most elaborate falsehoods ever sold to the American people. We were told that the taxpayer was stepping in – only temporarily, mind you – to prop up the economy and save the world from financial catastrophe. What we actually ended up doing was the exact opposite: committing American taxpayers to permanent, blind support of an ungovernable, unregulatable, hyperconcentrated new financial system that exacerbates the greed and inequality that caused the crash, and forces Wall Street banks like Goldman Sachs and Citigroup to increase risk rather than reduce it. The result is one of those deals where one wrong decision early on blossoms into a lush nightmare of unintended consequences.

    Worst of all, the Implicit Guarantee has led to a dangerous shift in banking behavior. With an apparently endless stream of free or almost-free money available to banks – coupled with a well-founded feeling among bankers that the government will back them up if anything goes wrong – banks have made a dramatic move into riskier and more speculative investments, including everything from high-risk corporate bonds to mortgage ­backed securities to payday loans, the sleaziest and most disreputable end of the financial system. In 2011, banks increased their investments in junk-rated companies by 74 percent, and began systematically easing their lending standards in search of more high-yield customers to lend to.
    "Those who cannot remember the past are condemned to repeat it"              ~ Edmund Burke

    "Senators are a never-ending source of amusement, amazement, and discouragement" ~ Will Rogers

    by Lefty Coaster on Fri Feb 01, 2013 at 12:48:15 PM PST

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